In an era where technology and tangible experiences coexist seamlessly, a new trend is reshaping the gifting landscape: phygital gifts.
Combining the convenience of digital innovation with the emotional resonance of physical products, phygital gifts are captivating consumers globally.
This hybrid model isn’t just a fleeting trend—it’s a strategic response to evolving consumer demands.
By 2023, 65% of shoppers expressed a preference for hybrid experiences that merge digital and physical elements.
In this deep dive, we’ll explore why phygital gifting is surging, its benefits, real-world examples, and how businesses can leverage this trend.
What Are Phygital Gifts?
Phygital gifts bridge the gap between the virtual and real worlds.
Imagine unwrapping a beautifully crafted journal paired with a subscription to a mindfulness app, or receiving a smartwatch that unlocks personalized fitness tutorials.
These offerings cater to consumers’ desire for multisensory engagement, blending instant digital access with the lasting value of physical items.
Why Phygital Gifts Are Dominating the Market
Consumer demand for hybrid experiences
Modern shoppers, especially millennials and Gen Z, crave experiences that offer both convenience and tangibility.
According to Accenture’s Life Trends 2023 report, 65% of consumers prefer brands that provide hybrid interactions.
Phygital gifts fulfill this by merging the speed of digital delivery (e.g., instant e-gift cards) with the sentimental value of physical keepsakes.
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The E-commerce boom
The rise of online shopping has set the stage for phygital innovation. Global e-commerce sales reached $5.8 trillion in 2023, pushing retailers to differentiate themselves.
Brands like Nike and Starbucks now use augmented reality (AR) and apps to enhance physical products, creating memorable unboxing moments.
Tech advancements driving personalization
From AR to blockchain, technology enables hyper-personalized phygital gifts.
For instance, LVMH’s AURA blockchain platform authenticates luxury items while linking them to exclusive digital content.
The AR market, projected to grow at a 40.9% CAGR from 2023–2030, further empowers brands to create interactive experiences.
Benefits of Phygital Gifting
Phygital gifting—combining physical and digital elements—offers exciting benefits for both consumers and businesses.
However, it also comes with challenges that companies need to consider.
For consumers
More interactive & engaging
Imagine receiving a luxury candle with a QR code that unlocks a guided meditation—this makes the gift more than just an object; it becomes an experience.
Interactive elements like apps, augmented reality (AR), or digital content add depth and excitement.
Instant gratification & convenience
Digital add-ons like e-tickets, subscriptions, or exclusive content can be accessed immediately, eliminating wait times and making the experience seamless.
A lasting impression
Physical gifts already have sentimental value, but pairing them with digital extras—like a heartfelt video message or a unique online experience—makes them even more memorable.
For businesses
Increased customer loyalty & sales
Hybrid experiences encourage repeat business.
Studies show that 73% of consumers are more likely to spend after engaging with a brand through a mix of physical and digital touchpoints .
Valuable consumer insights
Digital interactions provide businesses with data on customer preferences and behavior, helping them refine their offerings and marketing strategies.
Sustainability benefits
By integrating digital components, companies can reduce the need for excessive packaging while still delivering meaningful experiences.
Challenges and Considerations
While phygital gifting offers exciting possibilities, there are some challenges businesses and consumers should be aware of.
Technology can be expensive
For big brands, adding digital experiences like augmented reality (AR) or virtual reality (VR) can be a great way to stand out.
But for small businesses, developing these technologies can be costly and complicated. Not every company has the budget or expertise to integrate high-tech solutions.
Not everyone is tech-savvy
While younger generations may love interactive digital gifts, older consumers might find them confusing.
If a phygital gift requires downloading an app or using advanced technology, some people might not know how to access it—or may not want to.
Businesses need to ensure that digital experiences are simple, intuitive, and easy to use for everyone.
Keeping digital gifts secure
Digital components, like QR codes or personalized online content, need to be protected.
If security isn’t a priority, there’s a risk of fraud, data breaches, or cyberattacks.
Companies must invest in cybersecurity to make sure their customers’ personal information and digital gifts stay safe.
The Future of Phygital Gifting
Phygital gifting is expected to become a common part of our daily lives.
According to a 2022 study in the Journal of Consumer Marketing, blending digital and physical experiences can boost brand loyalty by up to 34%.
As technology evolves, we’ll see even more creative ways to merge the digital and physical worlds.
Virtual showrooms will let people explore and personalize gifts before they buy, while NFT-linked products will offer exclusive digital ownership alongside physical items.
With the rise of the metaverse and other immersive platforms, the line between online and offline gifting will continue to blur, creating even more engaging and personalized experiences.
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Conclusion
Phygital gifts are more than a trend—they’re a transformative shift in consumer culture.
By uniting the best of both worlds, brands can foster deeper connections, drive sales, and future-proof their offerings.
Whether you’re a business owner or a savvy shopper, embracing phygital is key to staying ahead in 2025 and beyond.
